Iranian Flat Steel Producers to Supply Total’s Project
S&P Global Platts citing comments made by Amirhossein Kaveh, secretary of Iranian Syndicate of Steel Pipe and Profile Manufacturers reported that Iran’s consumption of flat steel is expected to increase rapidly as a result of an investment contract with a consortium led by French oil and gas company Total SA to develop Iran’s major South Pars Gas Field.
Mr Kaveh told Platts that “It is good news for Iranian producers of pipe too. The projects need a huge amount of materials, including steel pipes and we have enough capacity to supply their requirements, which will reduce costs considerably.”
Mr Kaveh noted that the syndicate had not yet negotiated with Total but that Iranian suppliers of pipes had worked successfully with the oil and gas company before sanctions were imposed.
In the late 1990s, Total sourced pipe project requirements, including sour gas piping, from Iranian mills.
He said that “Most Iranian pipe mills are designed to supply the oil and gas sectors. Our cooperation with Total started from the first phase of South Pars Gas Field development projects. Now Iran’s pipe mills are better performers, supplying some of Turkmenistan’s gas pipeline projects.”
The strategic contract was signed between the National Iranian Oil Company and a consortium comprising Total, China’s CNPC International and Iran’s Petropars Company last week. More than USD 54 billion worth of natural gas and natural gas condensate will be produced by the project, Shana reported.
The Total-CNPC-Petropars deal is considered the first important international contract to have been signed in Iran’s energy sector, but is not expected to be the last.
Iran needs some USD 200 billion for financing oil and gas projects under the country’s sixth five-year development plan (2017-22), according to Iranian Oil Minister Bijan Namdar Zanganeh.
Iran and Total are also close to another deal for USD 2 billion investment in the country’s petrochemical sector.
According to Iranian Steel Producers Association, Iran produced more than 10 million tons of flat steel products during the last fiscal year (March 2016-17). Hot-rolled coil accounted for 6.98 million tonnes of the total output, relatively unchanged compared to the year before; cold-rolled coil production stood at 1.91 million tonnes, up 9% year-over-year; and coated coil output was 1.1 million tonnes, up 20% YOY.
HRC consumption during the same period stood at 7.57 million tonnes, down 5% YoY. Consumption of CRC and coated coil stood at 2.38 million tonnes and 4.2 million tonnes, up 1% and 8% respectively YOY.
Last year’s HRC exports were down 30% to 1.06 million tonnes, CRC shipments were up 91% to 153,000 tonnes, coated coil sales inched up 8% to 28,000 tonnes compared to the preceding year.
HRC imports during the same period were down 36% to 1.65 million tonnes, CRC was down 9% to 617,000 tonnes and coated coil dropped 16% YOY to 350,000 tonnes.
Source : Financial Tribune